Pentagon Auditors Urge Cutoff Of Payments To Halliburton

by Emad Mekay

(IPS) WASHINGTON -- Halliburton came under renewed fire May 18 when auditors urged the Defense Department to hold back payments to the company on an Iraq-based contract.

Meanwhile, critics geared up to protest at the controversial Houston-based firm's annual meeting.

The Defense Contract Audit Agency (DCAA) recommended the Pentagon suspend a payment to Halliburton of nearly $160 million for allegedly overcharging for meals to the military in Iraq in 2003.

The company's subsidiary KBR, formerly known as Kellogg, Brown & Root, supplied the food.

But in a statement, the company said the charges were fully justified. "KBR is disappointed that the DCAA continues to ignore the fact that KBR is contractually required to feed and support a minimum level of troops," it said, adding it believes the firm will "ultimately be reimbursed for these costs because its contractual position is strong."

Halliburton, which has been awarded more business than any other firm working in Iraq since the March 2003 U.S.-led attack and subsequent occupation, faces a number of investigations in the United States.

The Pentagon launched a probe after an audit found the company overcharged the U.S. Army by $61 million for gasoline transferred to Iraq as part of one deal, which was awarded without a bidding process.

Tuesday's call by the DCAA will likely strengthen the hand of the groups that plan protests Wednesday to coincide with Halliburton's shareholder meeting in Houston.

Pointing to the allegations of overcharging, they accuse the company of war profiteering and corporate cronyism. Vice president Dick Cheney is a former CEO of Halliburton.

The demos are likely to attract hundreds of activists, who are planning to exhibit a 25-foot pig-shaped balloon called "Hallibacon" and to don pig snouts and roll in money, organisers say.

"We're going to tell the shareholders and the chief executive officer of Halliburton to bring their employees home from Iraq and stop ripping off U.S. taxpayers and Iraqis," said Andrea Buffa of Global Exchange, one of the groups organising Wednesday's protest.

On Tuesday, the groups, which include CorpWatch and the Institute for Southern Studies, released a report that calls Halliburton, the "most unpatriotic corporation in America."

It says the firm used high-level political connections and campaign contributions to win contracts that allow it to profit from President George W Bush's "war on terrorism," in Iraq, Afghanistan, Guantanamo Bay and elsewhere.

Halliburton is one of the 10 largest contractors to the U.S. military, with several lucrative deals in Iraq. It earned $3.9 billion from the armed forces in 2003, a whopping 680 percent more than in 2002, when the company brought in just $483 million from the military.

Halliburton's business in Iraq is three times as much as that of Bechtel, its nearest competitor.

The groups' report, 'Houston: We Have a Problem', also provides numerous case studies of Halliburton's business dealings with some of the most brutal and corrupt regimes in the world, including those in Iran, Libya, Burma, Nigeria, Kazakhstan and with Iraqi dictator Saddam Hussein.

"Many of these business deals were subsidised with corporate welfare cheques from the World Bank and the U.S. Export-Import Bank (ExIm)," says the report.

According to the document, since 1992, the World Bank has approved more than $2.5 billion in financing for 13 Halliburton projects. ExIm is an even more significant financier of the company's global expansion: its board has approved more than $4.2 billion for 20 Halliburton projects since 1992, adds the report.

Its authors demand Washington cancel the firm's Iraq contracts.

"Enough evidence has been accumulated about Halliburton's shoddy work in Iraq and possible overcharges by the company of some $85 million, not to mention confirmed kickbacks worth more than six million dollars, to merit the cancellation of Halliburton's Iraq contracts."

The report also calls on the U.S. Congress to investigate and penalise war profiteering and to adopt the War Profiteering Prevention Act, 2003, which would prohibit profiteering and fraud relating to military action, relief and reconstruction efforts in Iraq.

"While U.S. soldiers and Iraqi civilians are killed almost every day, Halliburton has been making big profits off war -- often by breaking the law," said Rania Masri of the Campaign to Stop the War Profiteers. "It's time to bring them home and start a full congressional investigation into Halliburton and other war profiteers."

The groups also demand that the company end deferred payments to Vice President Cheney, who was the firm's CEO from 1995 to 2000, citing "conflict of interest for Halliburton." The company pays Cheney, a chief architect of the war in Iraq, more than $150,000 a year in such payments.